After you have read chap 15 on ‘Unemployment’ in the textbook, try to compare and contrast among the 3 basic types of unemployment discussed in that chapter in relation to output and real GDP.

Unemployment discussion

React to the following prompt: After you have read chap 15 on ‘Unemployment’ in the textbook, try to compare and contrast among the 3 basic types of unemployment discussed in that chapter in relation to output and real GDP. More specifically, explain which type of unemployment has created most joblessness in the U.S historically thus preventing growth in real GDP from taking place. Cite specific economic crises in the U.S to support your claims and share insights

Returning to the original demand and supply curves, if there was a shortage of wood, causing a shift in the industry supply curve, how would equilibrium price and quantity change?

Microeconomics

Instructions:

The assignments should be typed in Word. Diagrams and graphs, however, may be drawn with a pen and a ruler, drawn using Word/Excel, and scanned/pasted/attached to your submission.

Problem 1

The demand and supply functions for hockey sticks are represented by the following equations, where Qd is the number of crates of sticks demanded, Qs is the number of crates of sticks supplied and P is the price per stick in dollars:

Qd = 286 – 2P

Qs = 88 + 4P

  • a) Plot the supply and demand curves for hockey sticks.
  • b) Calculate the equilibrium price and quantity in the market for hockey sticks.
  • c) A major industry advertising campaign increases the demand for hockey sticks to the new equation Qd = 328 – 2P; plot the new demand curve together with the original demand curve and the original supply curve and calculate the new equilibrium price and quantity; by how much has the revenue to suppliers changed?
  • d) Returning to the original demand and supply curves, if there was a shortage of wood, causing a shift in the industry supply curve, how would equilibrium price and quantity change?
  • e) Returning to the original demand and supply curves, if there was a recession causing a contraction in consumer incomes, but not affecting suppliers, how would the curves shift and how would equilibrium price and quantity change?

 

What is the multiple regression equation- show all estimated coefficients in the equation? Interpret the coefficients and predict the fuel consumption when temperature is 45 degrees, and the chill index is 8. Are the coefficients of the multiple regression model statistically significant at alpha = 0.05 and 0.01? How do you know- discuss the test statistics used to determine the significance of overall explanatory power?

Eco 309-Assignment

Total points 125. Submit through D2L in Word/Excel format, single or multiple files. Must show all Excel work, answer all parts of the question, and write necessary explanations to earn full points. Use Excel to solve this numerical problem (project).

Question 4. The local utility company hypothesizes that fuel consumption (natural gas) in their town would be affected by temperature and chill index. The following data was collected for 10 weeks during the winter.

Week Fuel Consumption Y(MMcf) Average Temp

X1 (0F) Chill Index

X2

1 160 30.0 18

2 130 28.0 15

3 135 32.5 25

4 120 39.0 20

5 105 41.0 10

6 75 51.0 16

7 110 40.5 5

8

9

10 100

100

95 50.5

45.0

48.0 0

10

8

Conduct a Multiple Regression among Fuel consumption (Y), temperature (X1), and chill index (X2). Solve using excel. What is the multiple regression equation- show all estimated coefficients in the equation? Interpret the coefficients and predict the fuel consumption when temperature is 45 degrees, and the chill index is 8. Are the coefficients of the multiple regression model statistically significant at alpha = 0.05 and 0.01? How do you know- discuss the test statistics used to determine the significance of overall explanatory power? Discuss indicating the individual test statistics and p-values and their meaning in terms of statistical significance of individual coefficients. What are R2, adjusted R2 and se? Interpret R2 and Adjusted R2 and compare these values. Discuss the ANOVA table and conclude about the overall statistical significance of the model. Plot the errors and comment on the plot. What would be the estimated error when observed value of Fuel consumption is 75 units when Average Temp is 510 and Chill Index 16. By looking at the overall explanatory power and the statistical significance of the individual slope coefficients, do you suspect Multicollinearity? Why or why not?

 

Explain why a firm should shut down immediately when it can no longer cover their variable. Calculate the average total, fixed and marginal costs for a “competitive” firm with the following production cost schedule.

True or False questions

Indicate if the following questions are True or False. Explain “Why” your answer is True or False.

  1. Firms exist to produce and sell as much as possible. Why?
  2. Employing economic cost/profit instead of accounting cost/profit when making business decisions tends to generate more efficient or superior economic results. Why?
  3. For a monopoly, the marginal revenue declines as they sell more. Why?
  4. Some oligopolistic firms try to collude to fix market prices. Why?
  5. Market concentration measures fail to accurately assess the industry market power. Why?

The following questions are short answer questions. Clearly “explain” your ideas.

  1. Explain why a firm should shut down immediately when it can no longer cover their variable.
  2. Calculate the average total, fixed and marginal costs for a “competitive” firm with the following production cost schedule.

q Total Cost ATC AFC MC

0 10

10 12

20 16

30 26

40 38

50 75

60 120

What output or q  is the most efficient production level?

If the market price is $1.00 then what output or q is the most profitable production level?

  1. Explain why natural monopolies are regulated.

Explain why Economics is so cool. (Really)

 

Write in your own words what you have understood from the article(s) and how this relates to what you have learned in the Econ class.

Discussion Essay

Choose any topic discussed in the managerial economics class and write a 5 page essay with the following specifications.

  1. Typed – Double spaced
  2. Font Size – 11 or 12
  3. Margins – 1 inch
  4. APA formatting
  5. References included

The paper should consist of the following:

(a) A discussion on your selected topic covering the main points.

(b) At least one news article related to the chosen topic, showing the application of the concept in the real world. You can easily find such news articles on the web.

(c) Write in your own words what you have understood from the article(s) and how this relates to what you have learned in the Econ class.

Outline

  1. Introduction
  2. The Basics of Managerial Economics
  3. Managerial Decisions in Production and Costs
  4. Firm Organization and Market Structure
  5. Pricing with Market Power, Part I
  6. Pricing with Market Power, Part II
  7. Oligopoly Models
  8. Linear Programming
  9. Managerial Decisions Using Game Theory

 

Write an essay on how gun control is detrimental to citizens.

Gun control

Write an essay on how gun control is detrimental to citizens.

How do these numbers compare to the numbers chosen by a benevolent central planner who chooses G and c1, c2, c3 so as to maximize the sum of utilities? In particular: what is the level of G chosen by the central planner? And c1, c2, c3?

Political Economy – W4370

Question 1. This question asks whether voting can play a role in solving free-riding problems in public good provision, and if so why.

Imagine a small economy composed of three individuals, 1, 2, and 3. Each of them has utility function: Ui = ln(ci) + i 2 ln(G) where i ∈ {1, 2, 3}, ci is the consumption of individual i, and G is a public good.

All individuals have the same income y that can be immediately converted either in the consumption good or in the public good (or equivalently, all prices are equal to 1). Suppose first that the public good is voluntarily provided. Call gi ≥ 0 individual i’s provision of the public good. Hence: G = g1 + g2 + g3.

  1. (2 points). What is i’s budget constraint?
  2. (10 points) What are g1, g2, and g3? You are asked for the precise numerical values. (Hint: After solving the problem, verify whether your solution is feasible for all individuals—neither ci nor gi can be negative. If your preliminary solution gives you a negative value, set it to 0.
  1. (5 points) What is G? What are c1, c2, and c3?
  2. (10 points) How do these numbers compare to the numbers chosen by a benevolent central planner who chooses G and c1, c2, c3 so as to maximize the sum of utilities? In particular: what is the level of G chosen by the central planner? And c1, c2, c3? (Remember that the central planner can allocate the total resources of the economy as he sees fit).
  1. (5 points) Does the central planner’s solution you found satisfy Samuel- son’s condition? Please verify.
  1. (3 points) Please explain the economic rationale for the difference between the central planner’s solution and the decentralized, voluntary solution.

The benevolent, all-knowing central planner does not exist. What exists instead is a political system. In an effort to improve public good provision, the three individuals in this society decide to introduce a proportional income tax and devote all tax revenues to the public good. Thus ci = (1 − t)y and G = ty1 + ty2 + ty3 = t(3y). There is no other contribution to the public good.

Each individual proposes his ideal tax rate t, and the decision is then made by majority voting: if one of the three tax rates is preferred by a majority to both of the others, it is implemented.

1

  1. (5 points) Please write each individual’s utility as function of the tax rate
  2. (Hint: Using the budget constraint, what is i’s consumption of the private good ci now?)
  1. (5 points). What is the value of t preferred by each individual i? Call that ti for individual i.
  1. (5 points) Suppose the only three alternatives are the three values of t preferred by the three individuals. Please fill the following table with their preference rankings, as I did below for individual 1.

1 2 3

t1

t2

t3

  1. (3 points) Does this problem satisfy the conditions of the median voter theorem? Why?
  1. (3 points) What value of t is the Condorcet winner? What is G then? What are c1, c2, and c3?
  1. (4 points) How do these numbers compare to the numbers you find when the public good is voluntarily provided? And to the central planner’s solution? Do you expect these results to be general? Why?

Question 2. (80 points).

It is often argued that one advantage of deferring decisions to committees is that committees are less prone to ”capture”, the undue influence of lobbyists. The logic is simply that in a committee several individuals will need to be individual. But is this logic correct? (This question is based on ”Bribing Voters” by Ernesto Dal Bo’, American Journal of Political Science, 2007). Consider the following scenario. A lobbyist wants to obtain the approval of a proposal X. The lobbyist is not budget constrained and can afford a large expense to ensure approval, but would prefer to do so at as little cost as possible. In all that follows, think of this as a one-shot game with no future repetitions and no reputation effects. However, the lobbyist always respects his promises.

  1. (5 points). Imagine first that approval of the policy depends on a single policy-maker. The policy-maker is opposed to the proposal and derives a disutility that, expressed in dollar terms, equals θ, if the proposal is approved. θ is publicly known. On the other hand, the policy-maker values the transfer received from the lobbyist. If we call it b, the policy-maker’s utility is b − θ if the proposal is approved, and 0 otherwise. What is the minimum cost to the lobbyist of ensuring approval?

Suppose now that the proposal is decided by a committee of 5 voters. The decision is taken by simple majority, and all voters will vote simultaneously. All 5 voters oppose the proposal and each of them derives disutility θ from its 2 passing (again this fact and the value of θ are publicly known). All 5 voters would value positively transfers received from the lobbyist, and their utility if the proposal passes or does not pass is identical to the utility of the single policy-maker described above. As in real-life legislatures, all votes are observable–i.e. the lobbyist will be able to observe not only the final number of votes on each side but also who cast which vote. He offers each of the 5 voters the following contract: ”I will pay you θ + ε if you vote in favor of the proposal and your vote is pivotal” where ε is a small positive amount.

  1. When deciding how to vote, a voter does not know whether or not he is pivotal. He needs then to consider the different possible scenarios.

(i) (10 points). Identify in which scenarios the voter is indifferent between voting Yes or No, and in which scenarios the voter has a strict preference over voting Yes or No, given the contract offered by the lobbyist.

(ii) (10 points) For the rest of this question, you can assume that when indifferent the voter votes as if he were pivotal. How will the voter vote then?

(iii) (5 points). Given your answer to (ii) above, how many votes will then be cast in favor of the proposal, and how many against?

(iv) (10 points). How much does the lobbyist need to pay? How does this amount compare to the cost of lobbying a single policy-maker?

  1. (10 points). After having received the lobbyist’s offer but before voting, the committee members can meet and discuss how to vote. Would communication alone allow them to coordinate on a different outcome?
  1. (10 points). Suppose now that the committee members’ preferences are not publicly known. What is publicly known however is that the maximal disutility any committee member can suffer from the proposal is some known value θ. Can the lobbyist offer a new contract that will allow him to obtain a favorable vote now? How much will it cost him?
  1. Afraid of the possibility of capture, the committee decides to raise the threshold for passing the proposal to 4 positive votes. Let’s go back for simplicity to the scenario of point 3–a commonly known disutility θ that each voter would suffer from the proposal passing.

(i) (10 points). Will this change the outcome?

(ii) (10 points). Would requiring unanimity change the outcome?

 

What are the firm’s variable costs (VC) and fixed costs (FC) at Q*? What are this firm’s short-run profits in this example? What would be the firm’s Short-Run profits if it chooses to shut down? Should the firm keep producing in the short-run? How do you know?

Problem 1: Short-Run Profit Maximization [10 points]

Consider a firm that uses both capital (K) and labour (L) to produce a final product (Q) that it sells at the market price $5. The firm buys Labour at a cost of $4 per unit and capital at a cost of $10 per unit. The firm is a price-taker for all prices with the following production function:

𝑄 = 4𝐾 ! “# 𝐿

! “#

This production function implies the following:

𝑀𝑃𝐾 = 2 𝐿

! “#

𝐾 ! “#

𝑀𝑃𝐿 = 2 𝐾 ! “#

𝐿

! “#

Suppose also that the firm currently has 16 units of capital (K = 16) in the Short-Run. For Q1 – Q6, assume that we are operating in the Short-Run:

  1. Given the above production function, write down an expression for Labour employed as a function of the quantity produced (i.e. L = f(Q)). [1 point]
  2. Use the MPL and the wage rate to write down an expression for the Firm’s Marginal Cost per unit of output (Q) produced as a function of Q. [3 points]
  3. Show that the firm’s profit-maximizing quantity (Q*) is equal to 160 in the short-run. [1 point]
  4. What are the firm’s variable costs (VC) and fixed costs (FC) at Q*? [2 points]
  5. What are this firm’s short-run profits in this example? [1 point]
  6. What would be the firm’s Short-Run profits if it chooses to shut down? Should the firm keep producing in the short-run? How do you know? [2 points]

 

Problem 2: Long-Run Cost Minimization [8 points]

Use the same production function, MPK, MPL, and prices from Problem 1 (Q 1 – 6) for the following Q7 – Q9. Suppose also that we are now in the Long-Run, and that the firm has decided to still produce the same Q* as in Problem 1. That is, the firm decides to set Q = 160.

  1. If the firm wants to cost minimize, what must be the ratio of K to L that they employ given the prices in this market? [3 points]
  2. Suppose that the firm wants to produce Q* = 160. What is its cost-minimizing choice of K & L? [3 points]
  3. What are the firm’s profits with this choice of K & L? Is this greater than or less than your answer to Q5? Why is this the case? [2 points]

 

Problem 3: Long-Run Cost Minimization [12 points]

Suppose that there is a firm that produces chairs and the firm receives an order for 80 chairs. The firm has two resources available to it. The first is a (human) worker, who must be paid $18 for each hour they spend producing chairs. The second is a robot, that costs $15 of inputs (including electricity and maintenance) for each hour it works. Chairs produced by either method are identical and of equivalent quality. Assume that the use of these two inputs is completely independent. This means that the number of hours of robot-work does not affect the productivity of the worker, and vice versa. The production of chairs based upon the numbers of hours of each of the inputs used is given below. For example, 2 hours of robot time will produce 10 chairs. 7 hours of worker time will produce 54 chairs.

Robot

Hours

Robot

Production

Robot

Hours

Worker

Production

0 0 0 0

1 5 1 15

2 10 2 25

3 15 3 33

4 20 4 40

5 25 5 45

6 30 6 50

7 35 7 54

8 40 8 57

9 45 9 58

10 50 10 59

11 55 11 60

12 60 12 61

13 65 13 62

14 70 14 63

  1. Do any of the inputs in this example exhibit diminishing returns to scale? If so, which and how do you know? If not, how do you know? [2 points] Assume that the sale price of chairs is always sufficiently high that it is profitable to fulfill this 80-chair order. The firm needs to make 80 chairs to fulfill its order. Assume also that the firm is profit maximizing (& therefore cost minimizing).
  2. What combinations of robot and worker hours must they use to minimize costs? Show your work. [Use the equation that must be true for cost minimization for full credit] [4 points] Now suppose that the local economy increases the minimum wage, and the price of an hour of a worker’s time increases from $18 to $27.
  3. What does the principle of substitution say should happen to the firm’s use of (i) worker hours and (ii) robot hours? Explain your answer. [2 points] Continue to assume that it will be profitable to produce the 80 chairs and that the firm is profit- maximizing.
  4. With this new price for worker hours, what is the new combination of robot and worker the equation that must be true for cost minimization for full credit]

What is the role that a shareholder plays in a company? Do they actually contribute anything to the corporation? Are there other stakeholders who might be more important to a company than its shareholders?

The Social Responsibility of Business is to Increase its Profits  

Download and read “The Social Responsibility of Business is to Increase its Profits” by Milton Friedman which is the basis for the ‘shareholder value theory’ that would dominate business and business school thinking from the 1970s into the new century. Do you think that Friedman’s argument is valid?

Some things to consider:
What is the role that a shareholder plays in a company? Do they actually contribute anything to the corporation (except for the case of an IPO)?

Are there other stakeholders who might be more important to a company than its shareholders?

What is your specific, immediate short-term career goal upon completion of your MBA? Include an intended position, function, and industry in your response.

Personal statement for applying MBA

Essay #1 (Required) – What is your specific, immediate short-term career goal upon completion of your MBA? Include an intended position, function, and industry in your response. (word limit: 100)

Essay #2 (Required) – Draft a letter that begins with “Dear Admissions Committee” (word limit: 600)

This letter is meant to be your personal statement that provides the Admissions Committee with an understanding of your candidacy for Marshall beyond what is evident in other parts of your application. This essay is purposely open-ended. You are free to express yourself in whatever way you see fit. Our goal is to have an appreciation for and an understanding of each candidate in ways that are not captured by test scores, grades, and resumes.